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Obamacare means changes for employers, seniors, poor

Businesses, Medicare, Medicaid: Part 2 of a 4-part series

ByJENNI GRUBBS Times Staff Writer

Posted:
05/13/2013 10:53:23 AM MDT

People listen to a speaker at Progressive 15's Patient Protection and Affordable Care Act Summit May 2, 2013, at the Country Steak-Out in Fort Morgan. Progressive 15 holds many such events to educate the public on political policies and issues, such as coming changes in health care and health insurance. (JENNI GRUBBS/FORT MORGAN TIMES)

Full implementation in January 2014 of the Patient Protection and Affordable Care Act (ACA), often referred to as "Obamacare," will mean many required changes for businesses that provide health insurance and for people on Medicare and Medicaid.

Local lobbying group Progressive 15 recently held a day-long summit at the Country Steak-Out in Fort Morgan to inform people about what those changes will be and their expected effects.

Part 1 of this series featured information from Amy Downs of the Colorado Health Institute; Part 2 has information about changes for employers, as well as for Colorado Medicare and Medicaid programs; Part 3 will be on the presentation by Lorez Meinhold from the state Department of Health Care Policy and Financing; and Part 4 will be about the presentation from Kyla Hoskins from the Colorado Health Benefit Exchange.

Changes for employers

The ACA has already started changing health insurance, and thus health care, but lots more changes are coming, Downs, senior director at the Colorado Health Institute, told the audience at the Progressive 15 summit.

And some pretty big changes are coming for employers, she said.

Right now, nearly two of three Coloradans are covered by employee-sponsored health insurance, she said.

The coming changes will mean that more employers will need to offer "affordable" health insurance options to employees or potentially face pretty drastic fines.

In 2014, this would apply to employers with 50 or more full-time employees. Fines for failure to comply would be at least $2,000 per full-time worker, according to Downs.

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Employers with 26 to 49 full-time employees would not have a mandate to provide health insurance for employees in 2014, but they also would not be eligible for any state tax credits if they did offer it, she said.

Small employers, those with one to 25 full-time workers, also would not have a mandate to provide insurance, but if they did, they may qualify for state tax credits if the average annual wage of the workers is less than $50,000, according to Downs.

Colorado also has a wealth of information for employers about health-care reform on its website at colorado.gov/healthreform.

For example, a report called "Implementing Health Care Reform: A Roadmap for Colorado," includes the fact sheet "What Colorado Businesses Need to Know: 22 Questions."

One of the helpful things that the fact sheet includes is a list of all of the changes coming for businesses in 2014, as well as those planned further out in the future.

Still in 2013, what's changing is: the elimination of the tax deduction for Medicare Part D subsidies; Medicare taxes will increase for incomes more than $200,000 per year; flexible spending account contributions by employees will be capped at $2,500, but will not apply to employer contributions; employees must be notified of the state's health benefit exchange; and a health insurance fee will be implemented to fund comparative effectiveness research.

But these changes are nothing compared to what is coming for employers and the health insurance industry in 2014.

Several of them affect everyone, not just businesses: all individuals will be required to obtain coverage and essential benefit; there will be no annual limits; no pre-existing condition restrictions will be allowed on all ages; and insurance exchanges were to be established to offer affordable options for individuals and those not offered employer-sponsored coverage.

But a number of the coming changes will directly affect the types of coverage that larger businesses must offer to employees.

These include:

Definition of "full-time" worker will be 30 hours per week.

Possible employer penalty when business has more than 50 employees, coverage was not offered but one or more workers receive subsidies for coverage in an exchange.

Automatic enrollment, with an effective date subject to future regulations.

But a couple of the coming changes could help businesses with this process:

Expansion of small-employer tax credits.

Financial incentives for wellness program participants will be allowed to be up to 30 percent of premium.

And Downs pointed out that Colorado businesses with fewer than 100 employees may be eligible for tax credits if health insurance is offered.

She also directed employers to find out more about the Small Business Health Options Program (SHOP) Exchange in 2014, which is specifically to help employers find the coverage to provide for workers that fits their business.

For large employers, Downs explained what "affordable" and "adequate" meant in terms of providing health insurance coverage.

Affordable means that an employee's share of the cost is 9.5 percent or less than his or her household income.

To be considered adequate, an employer would have to cover at least 60 percent of "total allowed cost of benefits," she said.

Downs also said that the state expected 1,025 currently uninsured people in Morgan County to have employer-sponsored coverage next year, as well as 774 in Logan County; 169 in Phillips County; 104 in Sedgwick; 186 in Washington County; and 371 in Yuma County.

Medicaid

Downs also spoke about coming changes for Medicaid in Colorado.

In Colorado, Medicaid mostly covers low-income children, parents, pregnant women, individuals with disabilities and some of the elderly, she said.

The Colorado General Assembly passed Senate Bill 200, which approved Obamacare's plan to expand Medicaid eligibility to 133 percent of the federal poverty level in Colorado.

Gov. John Hickenlooper reportedly will sign this bill into law today (May 13).

The costs of this expansion are largely subsidized by the federal government for 2014, but changes to that subsidy already are planned in future years, and there is no guarantee about what changes may be made to it later by the U.S. Congress.

Downs said that state projects showed that there could be 1,322 new Medicaid enrollees in Morgan County, 1,014 in Logan County, 223 in Phillips County, 137 in Sedgwick County, 245 in Washington County and 484 in Yuma County.

Medicare

Coloradans on Medicare also can expect some changes, Downs said.

Currently, 9.2 percent of Coloradans get their health insurance through Medicare, according to state data. This includes people 65 and older and younger people with disabilities.

Downs said that nearly all Colorado seniors who have reached age 65 have Medicare, but many of those also have supplemental health insurance coverage.

There are many types of supplemental coverage that add onto traditional Medicare, as well as Medicare Advantage plans, which replaces and works differently than traditional Medicare.

On top of this, there is Medicare Part D, which is a separate type of coverage for prescription drugs.

Downs had what she called "some good news" for seniors related to health-care reform: Coverage of preventative services will be greater and the so-called "donut hole" coverage gap in Medicare Part D plans will be phased out.

But there also likely will be changes and reductions in payment to providers, including doctors, clinics and hospitals, which has created some uncertainty among providers.

Reactions

The reactions to the changes coming for employers and about Medicare and Medicaid drew some mixed reactions from summit attendees.

Michael Boyer, human resources/risk management director for the City of Fort Morgan, looked at it less as something to worry about and more as something to tackle and figure out.

He said that while he directly deals with helping the city figure out what type of coverage to offer for employees, the reforms had not really changed how he feels about health care.

"There have been rising costs with health care since the beginning of time," he said.

Boyer said that he looks at it as trying to find the best deal possible.

"First come the employees when you think of an organization and you want the best for the city," he said, "but at the same time, you have to think of the costs."

Boyer said that the city already had adopted some elements of the coming reforms in anticipation of their possible implementation.

But even having done this already, he added that dealing with health insurance is "always complicated."

Sandy Schneider-Engle, director of community relations at Colorado Plains Medical Center, said she was learning a lot from the presentations at the summit, but there was still a lot that had not yet been determined.

"I still think there's going to be challenges for everybody involved, including the providers," she said. "We probably won't know some of the things until after it's implemented."

Next in the series: Lorez Meinhold on expected costs and Colorado statistics.

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